Going through a divorce can affect various parts of your life. What some people may not realize is that the divorce can impact their credit.
The way the property division process is handled has a direct effect on how your credit might be affected. Consider these facts when you’re working through this aspect of divorce.
Creditors don’t have to abide by divorce orders
Debts don’t just go away when you go through a divorce. Instead, they have to be either paid off or assigned to a person during the property division process. If the debts aren’t paid off, creditors can come after any party on the account for payments, regardless of who was assigned the debt. This means that if your ex doesn’t pay the bills they’re supposed to pay, there’s a chance that you will end up with a negative mark on your credit report.
Paying off debts might be preferable
Because of the risk of being affected by your ex not paying the bills they’re assigned, it might be preferable to pay off as many debts as possible as part of the divorce. If the marital estate doesn’t have the funds to do this, it might be possible to liquidate some assets to pay off debts.
Balancing debts and assets
If debts will be assigned to each party, they can be used as an option to balance the assets. It’s critical for anyone in this situation to remember that they will have to be able to pay their regular bills plus any assigned debts and costs related to the assets they keep.
It’s wise to have experienced legal guidance so you can find out the options that you have for handling everything. This will help you to make logical decisions throughout the process.